The Digital Signage Insider

Does POP advertising really impact 75% of in-store purchase decisions?

Published on: 0000-00-00

One of the statistics that it seems like everybody in the narrowcasting industry likes to throw around is the notion that 70-75% of all purchase decisions are made by the shopper as he or she is actually walking around and shopping.  I've seen this claim made by industry analysts, digital signage systems integrators, and competitors...and even I myself have pointed it out on more than one occasion (though often in the context of "hey, does anybody know if this is true?").  So when I came across yet another article mentioning this golden stat a few days ago, I decided it was time to do some investigation, and see if I could find out once and for all where this information actually comes from.

It's easy to understand why so many people want to believe that it's true -- especially in our industry and related ones, like retail POP displays, out-of-home advertising, and store fixtures & merchandising.  With such a huge number of dollars at stake (75% of in-store retail purchases would have been about $975 billion in 2004 in the US alone, according to some very dirty extrapolation of these market statistics from Jupiter Media), anybody selling something to influence in-store buying decisions can make a strong argument about ROI.  But I've seen the 75% number thrown around without any attribution far too many times to believe in it wholesale.  That, and I have trouble believing that any arbitrary group of human beings can exhibit the same behavior 75% of the time.

So who is really the source of this stat?  Several webpages, including this one from Q-Matic, suggest that it was first discovered in a European Consumer Buying Habit Study conducted by Point of Purchase Advertising International (POPAI).  After poking around the POPAI archives, I haven't been able to find any studies by that name, nor have I found anything that makes a direct case for the 75% number.  Oddly, though, I did find a few articles in their free research overview that are a bit more enlightening.  The first is this overview of some of the group's more recent research efforts.  Here are a few of the salient points:

Conducted by Prime Consulting Group, the study goes further in measuring reach and frequency in the drug store environment. Findings show Retail Marketing delivers 6.5% in incremental sales while reaching an average 5,850 people per week. Other findings:
- 3 to 4 times greater sales lift when advertising is part of the promotion program.
- 31% of the brands study experienced over 20% sales lift
- At-retail advertising drove additional sales 70% of the time

Ok, driving additional sales 70% of the time is certainly nothing to brush off, but it's still not the smoking gun that we're looking for.  As close as we can get to that is this overview of the retail marketing industry, which states that:

Serving as the last three feet of the marketing plan, P-O-P advertising is the only mass medium executed at the critical point where products, consumers and the money to purchase the product all meet at the same time. It is no coincidence that with 74 percent of all purchase decisions in mass merchandisers made in store, an increasing number of brand marketers and retailers invest in this medium (emphasis added).

There's still no data to back it up, no studies cited, etc.  But the fact that an organization like POPAI is willing to make a claim like this is at least a little comforting.

One final source that I was trying to track down came from this article on Bell Canada's digital signage ambitions. In it, the author suggests that the J.C. Williams Group is responsible for the 75% number, quoting John Torella, a senior partner at the firm.  I've sent a few emails to several contacts there who have not yet been able to confirm any sources of the information, but hopefully this will change soon :)  I'll keep you posted on my findings, and certainly let us know if you come across any further sources of the industry's golden stat.


Comments   

0 Tobe Okigbo 2008-01-05 19:19
Thanks for this. I have been trawling the web looking for the source of this stat without much success. I'd put it down to stupidity on my part. It's good to know that somebody else could not locate the source too.
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0 Bill Gerba 2008-01-07 14:34
Hi Tobe, The original source of the stat was from a 1996 POPAI study of POP marketing in supermarkets, and what it essentially said was that about 70% of **BRAND** decisions are made in-store. That is, you might not make the decision to buy breakfast cereal when you're in the store (it was probably on your list before you arrived), but you're likely to decide between Cheerios and Special K. If you're a POPAI member, I believe you can still download that data from them (and they've done a number of other wide-scale surveys to reconfirm the number since then).
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0 JoseM 2013-10-14 17:39
The following link is more enlightening, shows some data from as far back as 1965: http://www.popai.com/engage/docs/Media-Topline-Final.pdf
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0 Jonathan T 2016-07-17 17:49
Here's

http://www.popai.com/Research%20Library/popai-mass-merchant-shopper-engagement-study.pdf
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